FN Media Group Presents Oilprice.com Market Commentary
London – November 6, 2020 – The world’s eCommerce king has found itself in a war that it may not be able to win. Its competitors are a group of specialty players that are overtaking Amazon one sector at a time. These specialist sectors include the pet food industry, that Amazon is losing to the now-giant Chewy.com, the $26.4-billion company that started as a dotcom in a basement and then stole major market share from Amazon. Mentioned in today’s commentary includes: Beyond Meat (NASDAQ:BYND), Kellogg (NYSE:K), Tyson Foods (NYSE:TSN), Yum! Brands (NYSE:YUM), Salesforce (NASDAQ:CRM).
Now, ecommerce pioneer Sean Dollinger who took Namaste Technologies from $6M to $1.2B in just 15 months has launched a new venture looking to shake up the $4.5-trillion global wellness economy.
It’s PlantX Life Inc (VEGA.CN) and it’s another specialty market … that plans to scoop up Amazon-style market share. What Chewy.com did for pet food, PlantX intends to do for plant-based everything from what we eat and what we put on our skin to what we wear and how we decorate our homes. This isn’t just a company – it’s an entire healthy lifestyle ecosystem.
The global wellness economy was already valued at $4.5 trillion in 2018… it’s an industry that’s grown faster than the global economy itself, going from $3.7 trillion to $4.2 trillion between 2015 and 2017. And PlantX is ready to capture a huge segment of this booming market.
PlantX has its own plant-based food products, house plants, cosmetics, decor, pet food, and even its own celebrity chef. You can shop online for just about everything you can imagine that is plant-based, shop in a smart store, order plant-based takeout or find the best places to dine vegan.
Just as Chewy.com is eating up Amazon market share in its specialist segment, PlantX is coming in for the entire vegan market. It’s already covered Canada. Now, it’s pushing into the United States, and it’s bringing its entire ecosystem with it—and there’s fast-paced news flow to go along with it …
Mother Nature Is Back—With A Multi-Trillion-Dollar Vengeance
Meat might be a $950-billion industry, but it’s starting to crack at the seams. It was starting to crack even before the pandemic. Now, the food revolution has been kicked into overdrive.
Overnight, it’s gone from a momentous vegan “hippie” trend to the beginning of a megatrend. Before the pandemic, meat was becoming increasingly associated with poor health, shorter life-spans and the spread of disease.
Now, it’s become synonymous with epidemic and pandemic. Think: swine flu, bird flu, salmonella and E. coli. The pandemic supply disruptions gave us all time to think.
Once it became more difficult to obtain meat products, we started to question the quality of what was there. And the safety. We started to try new things. And we weren’t disappointed. Plant-based food has become surprisingly good. Good enough, in fact, to be featured on the most unlikely of menus, from Burger King and Kentucky Fried Chicken to Jack-in-the-Box and McDonalds.
From the “Rebel Whopper” and “Beyond Fried Chicken” to the “P.L.T.” Nothing says “mainstream” like Fast Food. And it’s infiltrating the most mainstream of grocery stores, too.
A recent study by SupermarketPerimeter indicates that 77% of grocery shoppers in the United States have purchased plant-based meat alternatives in the past 6 months. Even more astonishingly, not just vegetarians and vegans are buying it: Some 40% of purchasers eat animal-based meat, too.
While the initial panic-buying sobered up from March to April, it’s holding on to major gains–enough so that the trend now appears solidified. In fact, plant-based products are a key driver of growth for food companies and retailers. Plant-based outpaces overall food growth by more than 5X.
By March 2020, grocery sales of plant-based foods that directly replaced animal-based foods grown to $5 billion—over 29% in only two years. And that is at a time when the entire U.S. retail food sales grew by only 4%.
Plant-based is outpacing the rest of the food market. And PlantX (VEGA.CN) —whose founder has created a billion-dollar company before—is positioned to play a major role in this outsized growth.
Growth-Driving Deal Flow & Megatrend Profit Margin Potential
The deal flow has been extremely fast-moving. In early September, PlantX closed a $30-million deal with San Diego-based Liv Marketplace to build and operate PlantX’s first brick-and-mortar retail location in California. That confirms a huge push into the United States, with a 4,515-square-foot store that will sell a line of over 5,000 plant-based products.
And a lineup of other deals …
- PlantX acquired UK-based Bloombox Clubin late September, and it’s now on target to hit $4 million in gross revenue.
- That same month, PlantX cut a series of deals with specialty producers, grocers, and even LA-based celebrity chef Gregg Drusinsky.
- It launched its own glacial water brand in September.
- On October 8th, PlantX jumped into the$38.4-billion North American pet food industry by launching yet another vertical with Kirtana Inc. products.
- Plant-based home meal delivery services started delivering in April and have already hit 10,000 meals.
They don’t hold inventory or maintain expensive warehouses. Ecommerce 2.0 is all about “curation”, not waste.
In Canada, PlantX has teamed up with Vancouver-based UpMeals, which has a Grade A kitchen. UpMeals prepares the chef-designed meals from PlantX, making PlantX profitable right out of the gate. They use FedEx to ship across Canada, with bulk meals going to a single address and then immediately disbursed by local courier.
By early next year, we expect it to be happening in the United States, as well. But there’s also a brick-and-mortar element. The PlantX flagship store, coming soon, isn’t your typical brick-and-mortar establishment.
This store is cutting edge in every respect. There are no carts. No aisles packed with products. Instead, it’s all scan QR codes, and payments by smartphone or tablet. That means that in a tiny retail space, PlantX can sell thousands of products. PlantX (VEGA.CN) says its plant sales have a 55% profit margin, followed by online food sales at 40% and delivery at 35%.
From Dotcom Revolution to Food Revolution
Beyond Meat and Impossible Foods have already stormed this scene. Beyond Meat IPO’ed at $66 a share. It’s exploded already to $195, with a market cap of ~$12 billion. Impossible Foods isn’t public. Neither has that kind of upside left that would mint a millionaire. And they’re all about alternative meat. Nothing more.
PlantX is far … beyond meat. It has a huge ecosystem with limitless verticals and a tiny market cap of only $60 million. Yet–it hopes to become the Amazon of everything plant-based.
It’s a new lifestyle, and it’s being led by a massively successful entrepreneur who’s done this before, and it could ride the tailwinds of a pandemic that has changed our lives forever.
Chewy.com was a threat to Amazon because it did pet food better. PlantX could potentially become a bigger threat because it does an entire plant-based lifestyle better. It’s a direct, undervalued challenge to the $4.5-trillion global health and wellness industry, and the it’s one of the best opportunities to come out of a devastating pandemic. And the opportunities are so huge that even major established brands are taking the leap.
Yum! Brands (NYSE:YUM), though not traditionally associated with health and wellness, is racing to grab a piece of this multi-trillion dollar trend. Kentucky Fried Chicken, the fast-food megalith, is diving in head first to offer its loyal customers a taste of the vegan lifestyle. Teaming up with the meantless sensation Beyond Meat, KFC has launched a line of chicken-less ‘chicken nuggets’ that have been a huge hit across the globe.
Already the meatless fried chicken alternative is offered in the UK, China, across Europe, Canada and the United States, and thanks to its success, it will likely continue to expand this offering across the globe. While nailing the iconic texture and flavor of KFC’s chicken without meat was no easy feat, the new vegan alternative has been wildly successful.
Thanks to partnerships with the likes of KFC and others, Beyond Meat (NASDAQ:BYND) has taken the world by storm, locking down its marketing in a way that compelled a new generation of would-be meat eaters to make the switch to a new plant-based alternative. And Wall Street has responded in kind. Since April, Beyond Meat has soared by 111%, quickly becoming a favorite for Robinhood stock traders.
Today, the plant-based meat alternative giant is already worth nearly $12 billion, but new research suggests the market could climb to a whopping $74 billion in just the next few years meaning there is plenty of room for the alt-meat giant to grow.
Though not exclusively engaged in the sale of plant-based products Tyson Foods (NYSE:TSN) is another company with an plant-based twist. It offers a wider selection of products available for both meat-eaters and plant-based diets. This is incredibly important in a time when almost 98% of consumers who buy plant-based products also buy animal meat.
Tyson is set to win big as a growing number of Americans begin to identify themselves as “flexitarian”, or people who still eat meat, but more often choose vegetarian options. While the “vegan wave” grabs more headlines, the reality is that many more consumers fall somewhere in the middle. And that’s great for Tyson, which offers an array of products that will tickle the tastebuds of a wide variety of customers – with a sustainable twist.
In a release, the company noted, “Tyson Foods is committed to sustainably offering the protein and food products that consumers want.”
Kellogg (NYSE:K) is another food giant making the jump to plant-based products in a bid to compete with the success of Beyond Meat and unlisted competitor Impossible Foods. Last year, Kellogg teamed up with Morningstar Foods to launch a line of plant-based products aptly named “Ingogmeato.”
Kellogg’s line of plant-based meat substitutes will be made from non-GMO soy, which is a step away from its competitors. Beyond Meat, for instance, uses a pea protein substitute. Kellogg’s move is a bold one because, while the taste and texture may hit the mark for many meat-eaters making the jump, it is a top allergen which could take away from some of its sales potential. Regardless, Kellogg is clearly eying its share of this new market and taking the younger generation’s push to go green – literally and figuratively – to the next level.
Salesforce (NASDAQ:CRM) isn’t exactly a plant-based distributor, but it is a worthwhile company to watch as the broader ESG push gains grounds. Though its primary function is as a SaaS company focusing on creating a platform to improve customer service, it’s dove in head first in its commitments to sustainability, charity and overall positive action within the community.
ESG is a big part of Salesforce’s core values. In fact, Salesforce CEO Marc Benioff wrote in an opt-ed for New York Times arguing for a new form of capitalism that, “In the United States, income inequality has reached its highest level in at least 50 years… It’s no wonder that support for capitalism has dropped, especially among young people.”
By. Paul Reed
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